Maintain short positions until confirmation for a reversal emerges. The black gold managed to recoup most of its intraday losses in the latest session, to settle USD0.33 lower at USD58.81. The low and high were registered at USD56.88 and USD59.14. Still, the relatively sharp intraday rebound has not produced sufficient evidence to signal its multi-week correction phase has completed. This is further supported by the fact it is still trading below the 200- day SMA line. Pending further positive price actions in the coming sessions, we are keeping our negative trading tone.

Given that the correction phase has not shown signs of reaching an end, we retain our recommendation for traders to stay in short positions. These were initiated at USD61.81, or the closing level of 2 May. For risk-management purposes, a stop-loss can be placed at the breakeven level.

We are keeping the immediate support at the USD54.52 level, which was the low of 8 Mar. This is followed by USD51.23, the low of 11 Feb. Meanwhile, the immediate resistance is expected to emerge at USD63.81, the high of 20 May. This is followed by USD66.60, or the high of 23 Apr.

Source: RHB Securities Research - 30 May 2019